Investments in Asia Pacific multi-family properties to double by 2030: JLL

Multi-family properties are set to become a major asset class in the Asia Pacific region by the next decade, as investment volumes for the sector is projected to more than double. According to a research report by JLL, total investments for multi-family assets is projected to reach US$20 billion across the region by the end of the decade.

Urbanisation, high renter population and stretched housing affordability are some of the factors behind the projected growth in multi-family investments. Director – head of living, Asia Pacific capital markets at JLL, Rober Anderson further added that investor interest in core multifamily assets has never been stronger.

In the January to September period, investments in the sector reached US$5 billion, increasing 12% y-o-y despite a 24% fall in total real estate investment volumes in the region over the same period. Transaction activity was led by Japan, followed by China and Australia.

The increasing number of young to middle-aged people and the ageing population has created a positive outlook for the rental residential market in Asia Pacific. Furthermore, as some capital sources have invested in large portfolios, deal activities are anticipated to focus on smaller quantum portfolios or single assets in the upcoming quarters.

In China, Shanghai is expected to emerge as a top investment destination due to its scalability and growing investible opportunities. In Japan, large metropolitan areas such as Tokyo, Osaka and Nagoya are potential investment spots for the multi-family market.

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Additionally, a post-pandemic rebound migration has pushed Australia into a housing crisis, creating opportunities for development in its build-to-rent market.

Yield compression for core multifamily assets in Asia Pacific will occur in the coming years, although at a slower pace than the previous decade. Pamela Ambler, head of investor intelligence, Asia Pacific, JLL, suggests conversion plays as an ideal solution to capitalise on the imbalance between supply and demand of rental housing within urban and core locations.

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